Jul 19, 2017 Legal Comments Off on U.S. dollar closes higher on Taipei forex (update)
Taipei--The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.027 to close at NT$30.397, as foreign investors continued to move their funds out of the country, dealers said.
A fall in the euro against the U.S. dollar served as a prompt to currency traders here to cut their holdings in the greenback, but continued buying by foreign institutional investors lent some support to the Taiwan dollar, the dealers said.
Despite fluctuations of the U.S. dollar, the local foreign exchange market remained quiet on moderate trading volume, as many traders stayed on the sidelines to await the conclusion of the European Central Bank's (ECB's) policymaking meeting a day later, the dealers said.
The greenback opened at NT$30.380 and moved between NT$30.340 and NT$30.400 before the close. Turnover totaled US$582 million during the trading session.
Soon after the local foreign exchange market opened, the U.S. dollar staged a technical rebound against the Taiwan dollar in the wake of a correction of the euro from the European unit's recent strength, the dealers said.
The weakness of the euro reflected hopes that the ECB will follow the U.S. Federal Reserve and slow down the pace of tightening its monetary policy, they said. Market sentiment remained cautious ahead of the ECB's policymaking meeting, the dealers said.
The greenback stayed stronger against the Taiwan dollar, as traders saw that foreign investors moved more of their funds out of the country after receiving large cash dividends from their investments in the local equity market, the dealers said.
However, foreign institutional buying in the local equity market kept the Taiwan dollar from falling further, they added.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$4.20 billion (US$138 million)-worth of shares on the main board, sending the weighted index up 0.24 percent to breach the 10,500-point mark at Wednesday's close.
The dealers said that foreign fund outflows could continue, as foreign investors are expected to receive a large chunk of cash dividends from contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) on Thursday.
TSMC will issue more than NT$180 billion in cash dividends and foreign investors, who own a roughly 80 percent stake in the chip maker, will take away the majority of the funds.
Source: Focus Taiwan News Channel